Exported goods can yield to the exporter a profit of, let us suppose, ten, twelve, or twenty per cent.  For the Allies to take an income from the Custom returns means in practice reducing the exports.  In fact, in Germany production must be carried on at such low prices as to compensate for the difference, or the exports must be reduced.

In the first case (which is not likely, since Germany succeeds only with difficulty, owing to her exchange, in obtaining raw materials, and must encounter worse difficulties in this respect than other countries), Germany would be preparing the ruin of the other countries in organizing forms of production which are superior to those of all her rivals.  Germany would therefore damage all her creditors, especially in the foreign markets.

In the second case—­the reduction of exports, one would have the exactly opposite effect to that imagined in the programme proposed—­that is, the indemnities would become unpayable.

In terms of francs or lire at par with the dollar, Germany’s exportations in 1920 have amounted to 7,250 millions.  In 1921 an increase may be foreseen.

If Germany has to pay in cash and kind 2,500 millions of marks at par, plus 26 per cent. of the total of her exports, then supposing an export trade of eight milliards, she will have to give 1,840 millions, or in all 4,540 millions of marks.  Thus we arrive by stages at less hyperbolical figures, coming down from the twenty-five milliards a year to something less than a fifth.  But to come to grips with reality, Germany in all ways, it must be admitted, cannot give more than two milliards a year, if, indeed, it is desired that an indemnity be paid.

Notwithstanding her great resources, France would not be in a condition to pay abroad two milliards a year without ruining her exchange, which would drop at once to the level of Germany’s.  Italy with difficulty could pay one milliard.

France and Italy are honest countries, yet they cannot pay their war creditors, and have not been able, and are not able, to pay any share of their debt either to the United States of America or to Great Britain.  As a matter of fact, up till now they have paid nothing, and the interest continues to accumulate with the capital.

Why have neither France nor Italy yet started to pay some of their debt?  Having won the War, France has had all she could have—­fertile territories, new colonies, an abundance of raw material, and above all iron and potash.  The simple explanation is that which I have given above.

Can, then, Germany, who is in a terrible condition, whose circulation promises ruin, who has no longer credits nor organization abroad, who has a great shortage in raw materials; can Germany pay four or five milliards a year?

We must also remember that Germany, in addition to the indemnity, must pay the cost of the Army of Occupation, which up to now has amounted to twenty-five milliards of paper marks a year, or more than 1,600 millions of francs at par.  That is, Germany has to bear for the support of the Allied troops a charge equal to the cost of maintaining the armies of France, Italy and Belgium before the War.